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BoA Q1 profit down 77%

Bank of America (BoA) said on Monday its profit plummeted 77 percent in the first quarter of this year to US$1.21 billion, highlighting the woes of the US banking sector from economic and credit turmoil.

Its profits shrunk dramatically from US$5.26 billion in the same quarter a year earlier when US financial markets were in much better shape.

The US’ largest banking group by market worth saw its earnings per share tumble to US$0.23 during the first three months of this year, marking an 80 percent slide from the same quarter last year.

The bank’s earnings disappointed most Wall Street analysts who had predicted Bank of America would reap US$0.41 per share.

“Despite revenue growth in most of our businesses, these results clearly did not meet our expectations,” Bank of America chairman and chief executive Kenneth Lewis said.

Overall revenues moderated 7 percent to US$17 billion during the first quarter compared with US$18.2 billion in the same period last year.

“The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance,” Lewis said.

Trading-related losses amounting to US$1.31 billion took a big bite out of the financial giant’s earnings while it said it had hiked its reserves to cover possible credit problems to US$6.01 billion.

Lewis gave a cautionary outlook for coming months, especially as the US economy continues to be buffeted by a persistent housing slump, a related credit squeeze and rising job cuts.
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